Saturday, August 11, 2012


  • Chris Mooney: Paul Ryan went all in on climate denial in 2009, accusing researchers of seeking to "intentionally mislead the public"

  • GemShares, a Chicago-based financial firm, intends to create an index (ETF), in which diamonds are arranged in 10 layers of comparable quality.

  • Arlan Suderman on Corn: USDA pegged the corn crop at 10.779 billion bushels on a yield of 123.4 bushels per acre. Harvested acres dropped by 1.5 million to 87.4 million acres. I wouldn't be surprised to see harvested acres drop by another 3 to 4 million in the months ahead. In essence, USDA cut the size of the crop by about 2.2 billion bushels. It increased old-crop carryout stocks by 118 million bushels, while also increasing imports by another 45 million. Ending stocks were put at bare minimum pipeline levels of 650 million bushels, necessitating that demand be cut by roughly 1.5 billion bushels to make everything balance. Young fund managers saw the demand cut and assumed that it had already slowed, which added to their incentive to take profits. Yet, the market will eventually have to do the job of rationing demand. New-crop global corn stocks fell to a 52.2-day supply, which is the tightest of the past 39 years. Just shy of 50% of those stocks are in China, where the credibility of the data is in serious question. Furthermore, USDA cut global corn feeding by more than a billion bushels, but only increased wheat feeding by a little more than 140 million bushels. There's a lot that doesn't add up in this sector.

  • Arlan Suderman on Beans: USDA cut the crop to 2.692 billion bushels, essentially matching our estimate of 2.696 billion. The agency pegged the yield at 36.1 bushels per acre, down from 40.5 bushels last month. New-crop ending stocks were put at bare "pipeline levels" at 115 million bushels, necessitating a sharp slash in demand to make things balance. Exports were cut to 1.11 billion bushels; while soymeal exports were dropped by 1,100 thousand short tons. This kind of export rationing will be very difficult without a political embargo or much higher prices, and I don't expect the embargo to happen. First chart resistance for September soybeans is $17, but the fundamentals would argue for much higher prices; perhaps topping $20. USDA pegged 2013 Brazil soybean production at 2.975 billion bushels, up from 2.865 last month and up from 2.406 billion the previous year. That may happen, depending on the strength of El Nino in the month's to come. But I question whether Brazil has the infrastructure to export soybeans much beyond current levels, let alone with corn exports increasing as well.

  • The U.S. federal government registered a budget deficit of about 69.6 billion U.S. dollars in July, bringing the total budget gap for the first 10 months of this fiscal year near the 1-trillion-dollar mark.

  • China's exports fell from 11.3% to 1%, and imports fell from 6.3% to 4.7%. The July trade surplus printed at $25.1 billion, versus $35.5 billion a year ago.

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